Lawmakers consider tax on university endowments

Wednesday

Searching for new solutions to the state’s economic woes, lawmakers are considering a tax that could buoy state coffers with hundreds of millions of dollars from private university endowment funds.

Searching for new solutions to the state’s economic woes, lawmakers are considering a tax that could buoy state coffers with hundreds of millions of dollars from private university endowment funds.

During budget debates Monday night, House members debated imposing a 2.5 percent tax on any endowment fund money that exceeds $1 billion and voted to have the state Department of Revenue study the proposal.

“I don’t think it’s a good idea actually going after endowment funds just because they have a lot of money, but there’s no excuse for universities not to work with communities,” Rep. George Peterson Jr., R-Grafton, said during an interview Tuesday.

Peterson, who serves on the Joint Higher Education Committee, said universities such as Harvard need to do more to be good neighbors, including possibly offering Payments In Lieu of Taxes to the cities and towns that host them.

“What I found somewhat disheartening was that it got into, ‘You’re rich and we’re going to tax you because we need the money,’ ” he said of the debate.

Several lawmakers, including Cambridge Democrats Reps. Alice Wolf and Timothy Toomey, as well as others with wealthy private universities in their districts, spoke out in favor of the tax Monday, according to the State House News Service.

“Why do we want to tax the poor all the time but we let off the hook the richest of the rich," said Rep. Angelo Scaccia, D-Readville, according to the news service. "We're not going to break them. We just want a little."

If the state passes the tax, Wellesley College alone would have to pay $17.5 million each year on its $1.7 billion endowment fund.

“I think the amendment singles out higher education among all nonprofit and charitable organizations unfairly … Wellesley uses its endowment wisely to support students and learning here,” said Mary Ann Hill, assistant vice president for public affairs.

Harvard University would have to pay more than $800 million on its $34.9 billion endowment fund.

Neither Bentley College nor Brandeis University have large enough endowments to trigger the tax, according to their media offices.

Lindsey Parietti can be reached at lindsey.parietti@cnc.com.

MetroWest Daily News

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.